Africa Ltd manufacture tennis racquets. The company uses the job costing system to cost its production. The following information relates to Poma Africa Ltd for the month of April 2020:

Additional information

• Factory overheads are applied at a rate of 10% of total direct cost.
• The only job still in process at 30 April 2020 was L49. All other jobs were completed during the month.
• Job C23 was completed at a total cost of R25 630, this amount includes applied overhead costs of R1 410.
• Sales during April were as follows: A33: All 20 racquets were sold at cost plus 40% mark‐up.
• F54: 23 racquets were sold at a price of R290 per racquet. C23: All 55 racquets were sold at cost plus 35% mark‐up.
• Actual factory overheads for April 2020 were R3 250.
• Marketing and distribution expenses amount to R4 700 for the month of April 2020.
• Ignore spoilage.

Required:

Round to two decimal places where necessary.

7.1 Calculate the cost of jobs A33 and F54 completed during April 2020.

7.2 Calculate the closing work‐in‐process as at 30 April 2020.

7.3 Calculate the net income for the month of April 2020.

7.4 Calculate the closing balance of finished goods as at 30 April 2020.

7.5 Calculate the over/under applied overhead for April 2020.

Problem Facts Information related to the Sosa Company for the year 2020: Common Stock As of the end of 2020, Sosa had 240,000 shares of common stock outstanding. The shares are due to the following common stock transactions:  January 1, 2020 – 100,000 shares of common stock outstanding  April 1, 2020 – issued an additional 50,000 shares for cash  July 1, 2020 - issued a 2 for 1 stock split  September 1, 2020 – purchased 60,000 shares for treasury stock Preferred Stock As of the end of 2020, Sosa had 30,000 shares of 6%, $10 par value, cumulative, convertible preferred stock outstanding. The stock had been outstanding all year and the conversion ratio was each share of preferred stock is convertible into 3 shares of common stock. Bonds Payable As of the end of 2020, Sosa had $800,000, 7% bonds payable outstanding. The bonds had been outstanding for the entire year and each $1,000 bond was convertible into 10 shares of common stock. Options Sosa also had 10,000 common stock options outstanding all year. Each option allowed the holder to purchase 1 share of Sosa’s common stock for $45. During 2020, the average market price of Sosa’s common stock was $48 per share. Additional Information Sosa’s 2020 net income was $580,000, and the company’s income tax rate was 34%. REQUIRED 1. Compute the weighted average number of common shares Sosa will use to compute basic earnings per share. (5 points) 2. Compute 2020 basic earnings per share (3 points) 3. Identify which of the potentially dilutive securities (preferred stock, bonds, options) are dilutive (support must be shown to receive credit for this question) (8 points) 4. Compute diluted earnings per share (4 points)

Basic EPS = $2.20

Diluted EPS = $1.68

Problem Facts Information related to the Sosa Company for the year 2020: Common Stock As of the end of 2020, Sosa had 240,000 shares of common stock outstanding. The shares are due to the following common stock transactions:  January 1, 2020 – 100,000 shares of common stock outstanding  April 1, 2020 – issued an additional 50,000 shares for cash  July 1, 2020 - issued a 2 for 1 stock split  September 1, 2020 – purchased 60,000 shares for treasury stock Preferred Stock As of the end of 2020, Sosa had 30,000 shares of 6%, $10 par value, cumulative, convertible preferred stock outstanding. The stock had been outstanding all year and the conversion ratio was each share of preferred stock is convertible into 3 shares of common stock. Bonds Payable As of the end of 2020, Sosa had $800,000, 7% bonds payable outstanding. The bonds had been outstanding for the entire year and each $1,000 bond was convertible into 10 shares of common stock. Options Sosa also had 10,000 common stock options outstanding all year. Each option allowed the holder to purchase 1 share of Sosa’s common stock for $45. During 2020, the average market price of Sosa’s common stock was $48 per share. Additional Information Sosa’s 2020 net income was $580,000, and the company’s income tax rate was 34%. REQUIRED 1. Compute the weighted average number of common shares Sosa will use to compute basic earnings per share. (5 points) 2. Compute 2020 basic earnings per share (3 points) 3. Identify which of the potentially dilutive securities (preferred stock, bonds, options) are dilutive (support must be shown to receive credit for this question) (8 points) 4. Compute diluted earnings per share (4 points) Check Figures:

Basic EPS = $2.20

Diluted EPS = $1.68

The slope of a regression tells us:

1. The covariance of X and Y
2. The marginal impact of X on Y
3. The marginal impact of Y on X
4. The level of X when Y is zero
5. The level of Y when X is zero

2. The intercept of a regression tells us:

1. The level of Y when X is zero
2. The level of X when Y is zero
3. The marginal impact of Y on X
4. The marginal impact of X on Y
5. The covariance of X and Y

3. ∑(Y – Ŷ)² is essentially a measure of

1. How much our predictions miss the actual data
2. How much variance we explain with X
3. How much variance we explain with Y
4. The covariance between the prediction and X
5. How much our predictions deviate from X

4. The main difference between the calculation of Pearson’s r and the slope of a regression is

1. The inclusion of the covariance in the numerator
2. The inclusion of the SSx in the denominator
3. The inclusion of the SSy in the denominator
4. The inclusion of the SSx in the numerator
5. The inclusion of the SSy in the numerator

5. A regression with a slope of 4 tells us

1. The slope is large and significant
2. The slope is large but not significant
3. The slope is small and significant
4. The slope is small and not significant
5. Not enough information to decide

6. A significance test for beta that fails to reject the null

1. Cannot distinguish beta from zero
2. Lacks sufficient information to make a decision
3. Can distinguish beta from zero
4. Tells us that beta is negative
5. Tells us we have made a Type I Error

The slope of a regression tells us:

1. The covariance of X and Y
2. The marginal impact of X on Y
3. The marginal impact of Y on X
4. The level of X when Y is zero
5. The level of Y when X is zero

2. The intercept of a regression tells us:

1. The level of Y when X is zero
2. The level of X when Y is zero
3. The marginal impact of Y on X
4. The marginal impact of X on Y
5. The covariance of X and Y

3. ∑(Y – Ŷ)² is essentially a measure of

1. How much our predictions miss the actual data
2. How much variance we explain with X
3. How much variance we explain with Y
4. The covariance between the prediction and X
5. How much our predictions deviate from X

4. The main difference between the calculation of Pearson’s r and the slope of a regression is

1. The inclusion of the covariance in the numerator
2. The inclusion of the SSx in the denominator
3. The inclusion of the SSy in the denominator
4. The inclusion of the SSx in the numerator
5. The inclusion of the SSy in the numerator

5. A regression with a slope of 4 tells us

1. The slope is large and significant
2. The slope is large but not significant
3. The slope is small and significant
4. The slope is small and not significant
5. Not enough information to decide

6. A significance test for beta that fails to reject the null

1. Cannot distinguish beta from zero
2. Lacks sufficient information to make a decision
3. Can distinguish beta from zero
4. Tells us that beta is negative
5. Tells us we have made a Type I Error

HYPOTHESIS TESTING SUMMARY ACTIVITY

Part 1: Overview of the Hypothesis Test for the Population Proportion Answer the following questions:

1) The general form of the test statistic for the hypothesis test for a population proportion is shown below. Label the different components of the test statistic.

2) For the following situations, state the null and alternative hypothesis. Then determine whether the alternative hypothesis is one-sided or two-sided.

a) A toy manufacturer claims that 23% of the 14-year-old residents of a certain city own a skateboard. A sample of fifty 14-year-olds shows that nine own a skateboard. Is there enough evidence to show that the percentage has changed?

b) At a large university, a study found that 25% of the students who commute travel more than 14 miles to campus. Recently, the university built more housing closer to campus so they believe that the proportion has decreased.

c) For students who first enrolled in two-year public institutions in fall 2007, the proportion who earned a bachelor’s degree within 6 years was 0.399. The president of Joliet Junior College believes that the proportion of students who enroll in her institution have a higher completion rate.

3) Use the information in question 2a (toy manufacturer) to answer the following questions.

a) Calculate the test statistic and draw a diagram with a normal curve to represent the sampling distribution of ??� in the context of this situation.

b) If the sample size of the survey was increased, would the test statistic increase or decrease? Would it give us more or less evidence against H0 ?

On 3/31/2020, Company ABC released its quarterly report, showing the sales in the first quarter had tumbled 30% as pandemic hit. However, the stock price for company ABC rose by 3% (instead of fell by 3%) after the report is released. Does this mean a failure of the Market Efficient Theory?

On 3/31/2020, Company ABC released its quarterly report, showing the sales in the first quarter had tumbled 30% as pandemic hit. However, the stock price for company ABC rose by 3% (instead of fell by 3%) after the report is released. Does this mean a failure of the Market Efficient Theory?

On 3/31/2020, Company ABC released its quarterly report, showing the sales in the first quarter had tumbled 30% as pandemic hit. However, the stock price for company ABC rose by 3% (instead of fell by 3%) after the report is released. Does this mean a failure of the Market Efficient Theory?

P5.11 A comparative statement of financial position for Spencer Corporation follows:

Spencer Corporation
Statement of Financial Position
December 31
Assets  
2020
2019
Cash  
$ 65,000 
$ 29,000 
Accounts receivable  
87,000 
59,000 
Inventory  
133,000 
81,000 
FV-OCI investments in shares  
63,000 
84,000 
Land  
65,000 
103,000 
Equipment  
390,000 
430,000 
Accumulated depreciation—equipment  
(117,000)
(86,000)
Goodwill  
 124,000 
 173,000 
 Total  
$810,000 
$873,000 
Liabilities and Shareholders' Equity      
Accounts payable  
$ 12,000 
$ 51,000 
Dividends payable  
15,000 
32,000 
Notes payable  
220,000 
335,000 
Common shares  
265,000 
125,000 
Retained earnings  
288,000 
284,000 
Accumulated other comprehensive income  
  10,000 
  46,000 
 Total  
$810,000 
$873,000 
Additional information:

1. Net income for the fiscal year ending December 31, 2020, was $19,000.
2. In March 2020, a plot of land was purchased for future construction of a plant site. In November 2020, a different plot of land with original cost of $86,000 was sold for proceeds of $95,000.
3. In April 2020, notes payable amounting to $140,000 were retired through the issuance of common shares. In December 2020, notes payable amounting to $25,000 were issued for cash.
4. FV-OCI investments were purchased in July 2020 for a cost of $15,000. By December 31, 2020, the fair value of Spencer's portfolio of FV-OCI investments decreased to $63,000. No FV-OCI investments were sold in the year.
5. On December 31, 2020, equipment with an original cost of $40,000 and accumulated depreciation to date of $12,000 was sold for proceeds of $21,000. No equipment was purchased in the year.
6. Dividends on common shares of $32,000 and $15,000 were declared in December 2019 and December 2020, respectively. The 2019 dividend was paid in January 2020 and the 2020 dividend was paid in January 2021. Dividends paid are treated as financing activities.
7. A loss on impairment was recorded in the year to reflect a decrease in the recoverable amount of goodwill. No goodwill was purchased or sold in the year.
Instructions
a. Prepare a statement of cash flows using the indirect method for cash flows from operating activities along with any necessary note disclosure.

b. From the perspective of a shareholder, comment in general on the results reported in the statement of cash flows.

I am wondering how to calculate the consolidation entry for accumulated depreciation in the consolidation of a less than wholly owned subsidiary acquired at more than book value with inventory transfers. Nothing I do seems to work, and I am getting really creative and confusing myself with all sorts of calculations. What is the proper formula for calculating consolidation entry for accumulated depreciation in this situation?

Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $112,700. At that date, the noncontrolling interest had a fair value of $48,300 and Soda reported $71,000 of common stock outstanding and retained earnings of $31,000. The differential is assigned to buildings and equipment, which had a fair value $28,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $31,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:

Pop Corporation Soda Company Item Debit Credit Debit Credit Cash & Accounts Receivable $16,400     $22,600      Inventory  166,000      36,000      Land  81,000      41,000      Buildings & Equipment  350,000      261,000      Investment in Soda Company  117,200             Cost of Goods Sold  187,000      80,800      Depreciation Expense  20,000      15,000      Interest Expense  17,000      6,200      Dividends Declared  31,000      16,000      Accumulated Depreciation    $141,000      $85,000  Accounts Payable     93,400       36,000  Bonds Payable     219,250       94,000  Bond Premium             1,600  Common Stock     121,000       71,000  Retained Earnings     128,900       61,000  Sales     261,000       130,000  Other Income     10,600          Income from Soda Company     10,450            $985,600 $985,600  $478,600  $478,600  

On December 31, 20X2, Soda purchased inventory for $31,500 and sold it to Pop for $45,000. Pop resold $30,000 of the inventory (i.e., $30,000 of the $45,000 acquired from Soda) during 20X3 and had the remaining balance in inventory at December 31, 20X3.

During 20X3, Soda sold inventory purchased for $56,000 to Pop for $80,000, and Pop resold all but $25,000 of its purchase. On March 10, 20X3, Pop sold inventory purchased for $15,000 to Soda for $30,000. Soda sold all but $7,800 of the inventory prior to December 31, 20X3. Assume Pop uses the fully adjusted equity method, that both companies use straight-line depreciation, and that no property, plant, and equipment has been purchased since the acquisition.

I need to be able to calculate the amount of accumulated depreciation for consolidated financial adjustment entries. I am aware that the transaction is Debited to Accumulated Depreciation and is Credited to Buildings and Equipment